"Traffic Culprit" vs "Double Charging" 'Network Usage Fee' Legalization Controversy Heats Up

Disagreements Persist Over 'Network Usage Fees' Between Telecom Industry and Overseas CPs
"Burden on Creators" YouTube Public Debate Draws Attention to 'Network Usage Fee Law'
Google and Netflix Korea Representatives Included in Next Month's National Assembly Hearing Witness List

The issue of 'network usage fees' has sparked ongoing legislative debates due to conflicting interests between ISPs (Internet Service Providers) and CPs (Content Providers). The photo is unrelated to the specific content of the article. [Image source=Pixabay]

[Asia Economy Reporter Yoon Seul-gi] As the National Assembly's audit begins on the 4th of next month, attention is focused on the so-called 'Network Usage Fee Law.' The Network Usage Fee Law is a bill that mandates content providers (CPs) who cause excessive traffic (data transmission volume) to pay for the use of internet networks.

However, since the interests of ISPs (Internet Service Providers) and CPs sharply conflict over the 'network usage fee,' legislative controversies are expected to continue. The issue has especially ignited as Google YouTube launched a signature campaign opposing the network usage fee law.

Recently, the National Assembly's Science, Technology, Information and Broadcasting and Communications Committee (STIBC) has been conducting discussions on the legislation of the network usage fee (amendment to the Telecommunications Business Act), including holding a public hearing and a policy forum. It is also reported that representatives of Google and Netflix Korea have been included in the witness list for the audit on the 4th of next month. The mandatory network usage fee law collectively refers to seven amendment bills to the Telecommunications Business Act, including a bill that mandates payment for network usage by value-added telecommunications service providers above a certain scale.

At the public hearing held on the 20th, a confrontation continued between SK Broadband, an ISP engaged in a legal dispute for three years over network installation and usage burdens, and Netflix, a CP.

Yoon Sang-pil, Director of External Cooperation at the Korea Telecommunications Operators Association (KTOA), who appeared as a witness for the ISP side, argued, "It is a natural market rule to pay the usage fee (network usage fee) when using an information and communication network (internet network)." He added, "99% of domestic and foreign CPs bear the 'network usage fee,' and through appropriate role-sharing among telecom companies, end users, and CPs, the Korean internet ecosystem has developed. However, some mega CPs that cause most of the internet traffic deny this internet transaction order, threatening the internet ecosystem."

On the other hand, the CP side argued that the demand for payment is a harmful effect of the monopoly of network operators. Park Kyung-shin, a law professor at Korea University and a witness for the CP side, stated, "The internet was created based on the 'mutual aid principle,' where if everyone transmits data, no one needs to pay transmission fees, making it the only communication system where everyone can communicate unlimitedly with everyone." He argued, "Charging fees just because data passes through a small domestic network without considering the cost of bringing data from overseas is a harmful effect of the monopoly of network operators."

Professor Park further pointed out that if the network usage fee is imposed, the principle of internet cooperation will be broken, causing difficulties for Korean content to expand overseas. He also said, "Internet usage costs will increase, and the spread of creators' content will be hindered, which will also impact the domestic economy."

The photo is not related to the specific content of the article. [Image source=Pixabay]

The controversy over the 'network usage fee' has grown because the traffic usage of global CPs has surged. According to an analysis by the Ministry of Science and ICT in February of the traffic volume of domestic service stability obligation target operators from October to December 2021, Google accounted for 27.1% of domestic traffic volume, and Netflix accounted for 7.2%. The traffic volume of these two CPs exceeds one-third of the total.

Moreover, as network and facility investments due to large traffic volumes have become the burden of the telecommunications industry, criticism has grown that overseas CPs are free-riding. The Korea Telecommunications Operators Association (KTOA) stated in a press release on the 26th, "The idea that companies causing overwhelmingly large traffic want to use internet assets built by other companies' investments for free does not align with market logic." It pointed out, "The core of the network free-riding prevention law controversy is whether the cost of continuous investment in networks and facilities, necessary to deliver the large traffic generated, should be borne by the beneficiaries or by the innocent general users as an additional burden."

As legislative discussions on the network usage fee emerged as a key issue in the audit, another overseas CP, Google YouTube, also launched a public campaign opposing the bill. Gautam Anand, Vice President of YouTube Asia-Pacific, stated on the official YouTube Korea blog on the 20th, right after the STIBC public hearing, "If the law is amended, YouTube may have to consider the difficult decision to change its business operations in Korea." He appeared to mislead public opinion by claiming that mandatory network usage fees would negatively affect the domestic creator ecosystem.

The government has stated that it will first observe the legislative discussions in the National Assembly. Kim Jun-mo, Director of the Telecommunications Competition Policy Division at the Ministry of Science and ICT, said at the policy forum on network usage fees held at the National Assembly on the afternoon of the 26th, "There are various issues and opinions among stakeholders regarding network usage fees." He emphasized, "It is necessary to seek solutions from the perspective of coexistence in the network ecosystem rather than viewing it narrowly as a dispute between specific operators." He added, "The government will also participate in legislative discussions and do its part to ensure reasonable development plans through necessary support."

Meanwhile, a total of seven amendment bills related to the network usage fees of overseas CPs have been proposed in the National Assembly. Since Representative Jeon Hye-sook of the Democratic Party of Korea first introduced the bill in December 2020, lawmakers from both ruling and opposition parties, including Kim Young-sik and Park Sung-joong of the People Power Party, Kim Sang-hee, Lee Won-wook, and Yoon Young-chan of the Democratic Party, and independent lawmaker Yang Jeong-sook, have all proposed related bills.

This content was produced with the assistance of AI translation services.